Washington (Platts)--2Feb2010/712 am EST/1212 GMT

The Obama administration followed through Monday on its commitment to cancel a nuclear waste project in Nevada, proposing to disband the program in its fiscal 2011 budget for the US Department of Energy.

"The administration has determined that Yucca Mountain, Nevada, is not a workable option for a nuclear waste repository and will discontinue the program to construct a repository at the mountain in 2010," the administration said in its fiscal 2011 budget proposal.

The administration said last year it would stop work on the Yucca Mountain repository.

DOE would receive $98.4 million for the program in fiscal 2011, which begins October 1, under the budget request. The request is roughly half of the $197 million the program received this fiscal year, which ends September 30.

DOE CFO Steve Isakowitz said Monday at a budget briefing that $45 million of the money sought would come from nuclear energy research and development, roughly $43.4 million from money the civilian nuclear waste program received this fiscal year, and $10 million for program redirection. All of the money sought would come from the Nuclear Waste Fund, DOE said.

The US Nuclear Regulatory Commission, meanwhile, which has been reviewing DOE's repository license application since fall 2008, requested $10 million for its Yucca-related work in fiscal 2011. An NRC budget document said that DOE may submit a request to the agency in 2010 to withdraw or suspend its repository license application.

"Upon the withdrawal or suspension of the licensing review, the NRC would begin an orderly closure of the technical review and adjudicatory activities and would document the work and insights gained from the review," NRC said in its budget request.

Yucca Mountain, roughly 95 miles outside Las Vegas, has been seen as a potential repository site since the 1970s. It became one of three candidate disposal sites when Congress passed the Nuclear Waste Policy Act of 1982. Five years later the act, as amended in 1987, named it the country's sole candidate for a disposal facility for high-level nuclear waste, a move that program opponents have charged was politically driven.

DOE spent more than two decades and $9 billion on the program. No show-stoppers were found during that time, according to DOE and the Nuclear Waste Technical Review Board, an independent oversight panel.

But during his presidential campaign in 2008, Barack Obama proclaimed that Yucca Mountain was not an option. Senate Majority Leader Harry Reid of Nevada has been a fierce opponent of the Yucca Mountain project, claiming the site is not safe.

On Monday, Reid called the administration's budget proposal "great news because it not only prevents Nevada from becoming the nation's nuclear dumping ground, it also protects hundreds of communities through which the waste would have to travel to get to Yucca."

Energy Secretary Steven Chu said Monday that DOE would file a motion with the NRC later in the day to "stay" all Yucca Mountain licensing activities for 30 days. NRC later confirmed it had received the motion.

Chu said that within the next 30 days the department would move to withdraw the repository license application that NRC began reviewing in fall 2008. DOE said the application would be "withdrawn with prejudice," a move that would prevent it from being considered again.

The administration would close the Office of Civilian Radioactive Waste Management, which has overseen development of the proposed Yucca Mountain repository and combine its responsibilities with DOE's Office of Nuclear Energy, the budget proposal said.

Termination of the program would mean that the utility spent fuel and DOE high-level radioactive defense waste now stored at sites in 39 states would remain there until there is a new path forward for the waste.

Chu on Friday announced the formation of a 15-member blue-ribbon commission that will evaluate alternatives to a Yucca Mountain repository and submit a final report to Chu in 24 months.

Mary Olson, nuclear waste specialist with Nuclear Information and Resource Service, said in a statement Monday that "Yucca exemplified the failure we get when waste policy is driven by politics rather than science."

She said the makeup of the commission "will take us all down the same old road with money and politics in the driver's seat."

Chu did not appoint a "single nuclear power opponent--or even mild critic--to the panel," Michael Mariotte, NIRS executive director, said.

--Elaine Hiruo, elaine_hiruo@platts.com

--Bill Loveless, bill_loveless@platts.com